LONDON, March 19 (Reuters) - A handful of banks will start
setting gold prices electronically on Friday, sources with
direct knowledge of the matter said, as Intercontinental
Exchange completes a sweeping change to London's bullion
benchmarks and dispenses with the century-old gold "fix".

Since 1919, representatives from four or five banks have
agreed a twice-daily price on which their customers - producers,
consumers and investors - could trade and value gold.

Sweeping reform triggered by a regulatory push for more
transparency after the Libor interest rate-rigging scandal broke
in 2012, saw banks stop acting as both data providers and market
makers.

As financial institutions even considered pulling out of the
fixing process, three different exchanges took on the challenge
of setting the separate precious metals benchmarks.

ICE Benchmark Administration (IBA), a subsidiary of ICE
, was chosen to provide a physically settled, electronic
and tradeable auction for what will become the LBMA (London
Bullion Market Association) Gold Price.

"Friday's move to electronic auctions and
record-keeping...should repair outside perceptions of London's
role in the market," said Adrian Ash, head of research at online
dealer BullionVault.com.
Continued...